Workhorse Group Inc. 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed by Workhorse Group Inc. on April 18, 2019, covering events that occurred on April 16 and April 17, 2019. The filing details amendments to existing common stock purchase warrants with two major institutional investors.
Key Financial Metrics
The filing text does not provide specific values for revenue, profit, cash flow, margins, debt, or liquidity. The report focuses exclusively on legal agreements regarding equity securities.
Material Changes and Agreements
- Marathon Asset Management LP Amendment: On April 16, 2019, the Company amended warrants held by Marathon. Unless shareholder approval is obtained for Nasdaq Capital Market compliance, the number of shares issuable under these warrants is capped at 19.99% of the common stock outstanding as of December 31, 2018. Failure to obtain shareholder approval for sufficient authorized shares constitutes an event of default under the Company's existing credit agreement.
- Arosa Opportunistic Fund LP Amendment: On April 17, 2019, the Company amended warrants held by Arosa. Until shareholder approval is secured to increase authorized shares, the Company is not required to reserve shares for Arosa's warrant exercise. This amendment will become null and void if the authorized share increase is not achieved by June 30, 2019.
Outlook, Risks, and Contingencies
The primary contingency identified is the requirement for shareholder approval to increase the number of authorized common shares. Without this approval:
- Issuance of shares under Marathon warrants is restricted to the 19.99% cap.
- The Company faces a potential event of default under its credit agreement with Marathon.
- The Arosa warrant amendment expires on June 30, 2019, potentially reinstating previous reservation requirements.
Investor Verification Checklist
- Verify the status of the shareholder vote required to increase authorized common stock.
- Confirm the exact number of shares outstanding as of December 31, 2018, to calculate the 19.99% cap for Marathon warrants.
- Review the full text of the credit agreement to understand the specific consequences of the potential default event.
- Monitor the June 30, 2019 deadline for the Arosa warrant amendment validity.